INTERVIEW - Czechs See No Big Cuts in CO2 Permits
Date: 24-Apr-06
Country: CZECH
Author: Jan Lopatka and Jan Korselt
For the first 2005-2007 emissions period of the EU's Emissions Trading Scheme, the Czechs negotiated with the EU an annual cap of 97.6 million tonnes of carbon dioxide. They did not fully use that amount in 2005, which left companies with extra carbon credits they can sell.
Det Norske Veritas, which verified emissions by companies accounting for 45 percent of the total, said these had a surplus of 5.2 million permits last year, worth some 155 million euros at current carbon credit prices.
This has led to expectations that the Czechs would come under pressure to cut the allocations for the 2008-2012 period.
But Tomas Chmelik, the head of the climate change department at the Environment Ministry, said there was no reason to expect any big change.
"There is no reason to approach the preparation of the plan in a way that we will reduce it in some fierce way," Chmelik told Reuters in an interview.
"I think the first (current) plan really can be taken as the basis...It is not necessary to panic at this point and hastily start cutting into the plan. We should instead evaluate whether we are able to find arguments for this level even though emissions in 2005 were low," Chmelik said.
SWIFT PLAN
EU members are due to present their national allocation plans to the European Commission by June 30. Chmelik said he expected a draft to be presented to the public around mid-May.
He added that unlike in the past, the environment and industry ministries were now working jointly on the plan, which should lead to a swifter adoption on the government level.
However, the Czech Republic is holding an election on June 2-3, which may complicate matters.
Unlike countries in western Europe which must cut pollution to meet targets they committed to in the so-called Kyoto Protocol, the Czechs cut emissions during industrial restructuring in the 1990s and actually now have enough room to increase pollution yet remain under the target.
Chmelik said the Commission has signalled it would not look too closely at actual 2005 figures -- the first year of the emissions trading system -- when assessing new allocation plans.
The reason is that some companies have made investments or process improvements to cut emissions.
If this leads to lower future allocation of pollution permits, it would in fact punish those who met the target of the system, which is cutting the release of the greenhouse gas.
Chmelik said he was in favour of not throttling Czech companies by reduced allocations when not necessary, also taking into account the country's fast economic growth.
"For us, the binding limit is what the European Commission will be willing to accept but I think there is quite a broad leeway to argue successfully," Chmelik said.
"I think there is enough space to take into consideration economic growth," he added.
The biggest single Czech company affected by the emissions trading scheme is power maker CEZ.